Because of the government’s size, there are now so many different programs billing the government, and it has become difficult to catch fraud. This is where the average citizen and the Qui Tam Policy come into play. It encourages ordinary citizens to watch for and catch fraud against the federal government.
Government Billing Fraud
The Qui Tam Policy, or False Claims Act, is a way for the United States to cut down on fraud against the government. It allows a citizen, known as the whistleblower or relator, on behalf of the government, to sue an individual or company that has been knowingly filing false claims with the government. In return, the relator will usually receive a reward. These rewards can range from 10 to 30 percent of the recovered damages and fines, and the payment of any attorney fees or other expenses incurred during the suit.
Who Can File a Claim?
Anyone may file a False Claims lawsuit if they have knowledge of an individual or company filing a false claim with the government. Usually this person is an employee or former employee of a company, but not always. The relator must allege that the individual or company, known as the defendant, knowingly presented the government with a false claim, knowingly used a false claim to obtain money from the government, or conspired to defraud the government by getting a false claim to be allowed or paid.
Investigating the Claim
If a decision is made to proceed with a lawsuit, the relator must file a false claims lawsuit against the defendant in federal court under seal. A lawsuit filed under seal is unable to be viewed by the public and the relator and attorney are prohibited from discussing the case with anyone, including the defendant. At this point in the case, the defendant is not yet notified of the charges. This allows the federal government to investigate the claim without the defendant finding out.
Privacy and Discretion
The case can be under seal for two months or more. If the government applies for certain extensions, it could be under seal for years. During this time, the government investigates the allegations made by the relator. This is all done without the defendant’s knowledge. When the investigation is complete the seal is lifted. A decision is then made by the government on what they will do. They can either decide to intervene, decline to intervene, settle the case, or seek dismissal of the action.
Penalty for Fraud
In the event that the government does intervene in the case, they will work with the relator and his or her attorney. Penalties for the defendant can be payment of triple damages, a $5,000 to $10,000 fine for each claim, government litigation cost, and payment of the relator's attorney fees. In some cases where the relator was an employee, there may be additional fees. In addition to the initial reward, some relators are awarded double the amount of back pay and interest of back pay, and compensation for special damages.
At times, the government may decide to not interfere. The relator may then go ahead with the lawsuit on behalf of the government, but the success rates on these are typically lower than if the government were to intervene. The rewards would be much greater, though. A relator would be rewarded 20 to 30 percent of the damages.
If the government decides to settle the case, at times they will agree to accept two to three times the damages and forgive any civil penalties. In these instances, though, the defendant would still be liable to pay any attorney fees incurred by the relator.